Migration global
In its latest Global Economic Prospects 2006, report released Wednesday, the World Bank takes on the task of examining the immigration phenomenon on a large scale, reports Le Figaro (France).
In an interview with the French daily François Bourguignon, Chief Economist and Senior Vice President of the World Bank, said that remittances constitute a powerful tool for poverty reduction. Immigrants coming from the South (a number reaching almost 200 million) send 20 percent of their incomes back to their country of origin. This is quivalent to $167 billion in 2005 ($126 billion for 2004). On a global scale, these private capital flows now represent double all government aid granted to developing countries by developed countries.
Business Line (India) notes Bourguignon said that remittances are an important way out of extreme poverty for a large number of people. The Bank presents concrete evidence that an increase in migrants would raise the workforce in high-income countries by three percent by 2025, and increase global real income by 0.6 percent or $356 billion. Such an increase in migrant stock would be in line with the migration trend observed during the past three decades, the report said.
The Financial Times meanwhile writes the World Bank said rich and poor countries need to make it cheaper for immigrant workers to send money back to their families to "sharpen" the impact of remittances on poverty reduction. Unreported flows mean that remittances are probably 50 percent greater than the recorded number, at a conservative guess, the Bank said. Up to 45 percent of total remittances are paid by migrant workers in other poor
countries, it said. As well as increased immigration and higher incomes, the rise in remittances reflected changes in the financial services industries that have made it easier to transfer money, and better measurement.
The Daily adds that the countries receiving the greatest remittances are - in order - India, China, Mexico, France and the Philippines. Wage levels in rich countries are typically five times those of poor countries in similar occupations - adjusting for local purchasing power - the Bank said. The global development lender called for policies to improve the access of poor people to financial services to send and receive remittances - including expanding banking networks and credit unions and allowing developing country banks to open branches in rich countries.
Xinhua (China) further notes the report said that the world's gross domestic product (GDP) for the year increased an estimated 3.2 percent, down from 3.8 percent last year. It said the slowdown among industrial economies, which
began in the second half of 2004, continued this year. It predicts GDP growth in these countries will come in at 2.5 percent, down from 3.1 percent last year. Growth in developing countries is also estimated to slow somewhat, from 5.9 percent this year to 5.5 percent by 2007, the report said. The Bank said expansion in East and South Asia is projected to remain strong, but East Asia's aging population is expected to somewhat dampen projected growth rates there.
The Wall Street Journal Europe writes the report revealed China and India as the biggest winners in the global trade in textiles, highlighting the trend of emerging economies reaping the benefits of trade liberalization at the expense of poorer states. The report estimates that Chinese textiles exports to the developed world surged about 50 percent in value in the first half of 2005 compared with the same time last year. The increase came after a global quota system in the textile trade ended at the start of the year. Indian textiles exports rose by an estimated third. Tajikistan, Myanmar and Nepal saw their textiles exports plummet.
Reuters quotes Andrew Burns, an author of the report, as saying "the increase in the oil price since 2004 is expected to generate substantial economic costs for oil-importing poor economies that are not fully captured in the GDP numbers." Unless the most vulnerable poor countries receive assistance soon to cope with high energy prices, the World Bank said "they may be forced to cut essential non-oil imports."
With nearly 200 million people now living as expatriates globally, the World Bank said both developing and developed countries need to pay more attention to the links between migration, economic growth and poverty. "Remittances are hard-earned income that, in most cases, has already been taxed," said World Bank chief economist Francois Bourguignon. "They should not be taxed again, and governments should not try to count them as development aid."
The news agency adds the Bank said that financial regulators should also take care not to clamp down on remittances in their bid to root out money laundering, fraud and other criminal transactions. "While regulation is
necessary to curb money laundering and terrorist financing, it must be implemented in a way that does not interfere with the objective of reducing remittance costs," it said.
"The challenge facing policymakers is to fully achieve the potential economic benefits of migration, while managing the associated social and political implications," said Bourguignon, reports Agence France Presse. The news agency further writes that those implications have been thrown into sharp relief by three weeks of rioting that has hit France and other parts of Europe. Most of the youths carrying out the violence in France come from impoverished neighborhoods with big communities of immigrants from the country's former colonial possessions in North and West Africa.
Global Economic Prospects 2006: Economic Implications of Remittances and Migration. Available on the World Bank Website
